Exhibit 10.2


 


EXECUTION VERSION


 


LETTER AMENDMENT NO. 2


 


to


 


MASTER SHELF AGREEMENT


 


As of June 18, 2004


 


Prudential Investment Management, Inc.

The Prudential Insurance Company of America

Pruco Life Insurance Company

Each of other purchasers of Series C Notes


listed on the Purchaser Schedule

attached hereto (the “Series C
Purchasers”)


c/o Prudential Capital Group


Gateway Center Four


100 Mulberry Street


Newark, New Jersey 08102-4069


 


Ladies and Gentlemen:


 


We refer to the Master Shelf Agreement, dated as of June 3, 2003,
among Crosstex Energy Services, L.P., a Delaware limited partnership (the “Company”),
Prudential Investment Management, Inc. (“Prudential”), The Prudential Insurance
Company of America (“PICA”) and Pruco Life Insurance Company (“Pruco”
and, together with Prudential, PICA and each of the Series C Purchasers, the “Purchasers”),
as amended by Letter Amendment No. 1 dated as of April 1, 2004 (as so
amended, the “Agreement”).  Unless
otherwise defined in this Letter Amendment No. 2 to Master Shelf Agreement
(this “Amendment”),
the terms defined in the Agreement shall be used herein as therein defined.


 


The Company desires that Prudential amend the Agreement to increase the
aggregate amount of Notes that may be issued under the Agreement to $125,000,000,
extend the Issuance Period to June 18, 2007 and provide for the
authorization of the issuance of a series of senior secured notes thereunder as
hereinafter provided.  In addition to
the foregoing, the Company has requested that the Purchasers make certain other
amendments to the Agreement.


 


Subject to the terms and conditions specified herein, the Purchasers
have indicated their willingness to make such amendments, all as more
particularly set forth herein. 
Accordingly, subject to satisfaction of the conditions set forth in
paragraph 12 hereof, and in reliance on the representations and warranties of
the Company set forth in paragraph 11 hereof, the Purchasers hereby agree with
the Company to amend the Agreement as provided in paragraphs 1 through 10 below,
effective in each case as of the Amendment No. 2 Effective Date (as defined in
paragraph 12 below).


 

















 


1.                                      Amendment to Cover Page.


 


Cover
Page.  The
cover page of the Agreement is hereby amended by replacing “$50,000,000”
therein with “$125,000,000”.


 


2.                                      Amendment to Paragraph 1. Authorization of Issue of
Notes.


 


Paragraph
1. Authorization of Issue of Notes.  Paragraph 1 of the Agreement is hereby
amended by deleting the first sentence thereof in its entirety and replacing it
with the following:


 


“The Company will authorize the issue of its senior secured promissory
notes (the “Notes”) in the aggregate principal amount of $125,000,000; to
be dated the date of issue thereof; to mature, in the case of each Note so
issued, no more than 10 years after the date of original issuance thereof; to
have an average life, in the case of each note so issued, of no more than 8
years after the date of original issuance thereof; to bear interest on the
unpaid balance thereof from the date thereof at the rate per annum, and to have
such other particular terms, as shall be set forth (a) in the case of each
Series A Note and Series C Note, paragraphs 2H(1)(a) and 2H(1)(b) hereto,
respectively, and (b) in the case of each Note of any other Series of Notes so
issued, in the Confirmation of Acceptance with respect to such Note delivered
pursuant to paragraph 2F; and to be substantially in the form of Exhibit A-1,
Exhibit A-2 or Exhibit A-3, as applicable, attached hereto.”


 


3.                                      Amendments to Paragraph 2.  Purchase and Sale of Notes.


 


(a)                                  Paragraph
2B. Issuance Period. 
Paragraph 2B of the Agreement is hereby amended by deleting clause (i)
thereof in its entirety and replacing it with “(i) June 18, 2007 and”.


 


(b)                                 Paragraph 2H. 
Closing.  Paragraph
2H(1) of the Agreement is hereby renumbered as paragraph 2H(1)(a), and new
paragraph 2H(1)(b) is added to the Agreement, such paragraph 2H(1)(b) to read
as follows:


 


“2H(1)(b).  Series C Closing. 
The Company hereby agrees to sell to each Purchaser identified on the Purchaser
Schedule attached hereto as a Purchaser of the Series C Notes and,
subject to the terms and conditions herein set forth, each such Purchaser
agrees to purchase from the Company under the Facility the 6.96% Senior Secured
Notes, Series C, due June 18, 2014 (the “Series C Notes”) in the
aggregate principal amount set forth opposite its name on the Purchaser
Schedule attached hereto at 100% of such aggregate principal
amount.  The Series C Notes shall be
substantially in the form of Exhibit A-3 attached hereto.  The Company will deliver to Prudential, at
the offices of Schiff Hardin LLP, 6600 Sears Tower, Chicago, Illinois  60606, one or more Series C Notes registered
in the name of such Purchasers, evidencing the aggregate principal amount of
Series C Notes to be purchased by such Purchasers and


 


2

















 


in the denomination or denominations specified in the Purchaser
Schedule attached hereto against payment of the purchase price thereof
by transfer of immediately available funds to the credit of the Company’s
account #0880423630 at Union Bank of California, Los Angeles, California (ABA
No. 122000496) on the date of closing, which shall be June 18, 2004, or
any other date upon which the Company and Prudential may mutually agree in
writing (the “Series C Closing”).”


 


(c)                                  Paragraph 2H(2). 
Subsequent Closings. 
Paragraph 2H(2) of the Agreement is hereby amended by replacing “Baker
Botts L.L.P., 2001 Ross Avenue, Dallas, Texas 
75201” with “Schiff Hardin LLP, 6600 Sears Tower, Chicago, Illinois  60606”.


 


(d)                                 Paragraph 2I(2). 
Issuance Fee. 
Paragraph 2I(2) of the Agreement is amended in its entirety to read as
follows:


 


“2I(2).  Issuance Fee. 
The Company will pay to each Purchaser in immediately available funds a
fee (the “Issuance
Fee”) on (i) the Series C Closing in an amount equal to 0.15% of the
aggregate principal amount of the Series C Notes sold to such Purchaser on the
Series C Closing, and (ii) each Closing Day on or after June 18, 2004 in
an amount equal to 0.25% of the aggregate principal amount of Notes sold to
such Purchaser on such Closing Day.


 


(e)                                  Paragraph
2I(5). Renewal Fee. 
Paragraph 2I(5) of the Agreement is hereby deleted in its entirety.


 


4.                                      Amendment
to Paragraph 3B.  Opinion of Purchaser’s
Special Counsel.  Paragraph 3B of
the Note Agreement is amended by replacing “Baker Botts L.L.P.” with “Schiff
Hardin LLP”.


 


5.                                      Amendments
to Paragraph 6.  Negative Covenants.


 


(a)                                  Paragraph 6A(4).  Minimum Tangible Net Worth. 
Paragraph 6A(4) of the Agreement is hereby deleted in its entirety.


 


(b)                                 Paragraph 6C(2).  Debt.


 


(1)                                  Clause (xi) of paragraph 6C(2) of the Agreement
is amended in its entirety to read as follows:


 


“(xi)                          unsecured
Funded Debt of the Company, a Finance Entity and/or any Guarantor, and/or any
unsecured guaranty by the Company or any Guarantor of Funded Debt of the MLP or
any other Affiliate of the Company; provided that (a) the Company is in
compliance with paragraph 6A(3) immediately after giving effect to the
incurrence of any such Funded Debt or guaranty determined based upon the
outstanding amount of Funded Debt of


 


3

















 


 


the Company and its Subsidiaries on a Consolidated basis, immediately
after giving effect to such incurrence, EBITDA for the four fiscal quarters
most recently ended on or before the date of such incurrence and the maximum
Leverage Ratio allowed as of the end of the fiscal quarter most recently ended
on or prior to the date of such incurrence (and in the case of any guaranty of
Funded Debt of the MLP or any other Affiliate of the Company, the aggregate
amount of such Funded Debt so guaranteed shall be “Funded Debt” of the Company
for purposes of calculating the Leverage Ratio), (b) such Debt does not impose
any financial or other “maintenance” covenants on the Company or any of the
Subsidiaries that are more onerous than the covenants set forth in this
Agreement, (c) such Debt shall not require any scheduled payment on account of
principal (whether by redemption, purchase, retirement, defeasance, set-off or
otherwise) prior to the latest maturity date of any Note and (d) such Debt
shall contain terms and conditions that are customary for such transactions.”


 


(2)                                  The following new paragraph is added to the end
of paragraph 6C(2) of the Agreement:


 


“Notwithstanding the foregoing, if at any
time any provision of Section 6.02 of the Bank Agreement (other than
clause (j) thereof) is modified, then the Company and the holders of the Notes
agree to execute an amendment to this Agreement, in form reasonably
satisfactory to the Required Holder(s), under which this paragraph 6C(2) is
modified in the same manner in which Section 6.02 of the Bank Agreement
has been modified; provided, however that no holder of a Note
shall be required to execute any such amendment to this Agreement unless the
holders of the Notes have received compensation equivalent (on a proportionate
basis based upon the aggregate outstanding principal amount of the Notes and
the aggregate outstanding principal amount of the Debt outstanding under the
Bank Agreement) to any fees or other compensation paid to any Bank or its agent
with respect to such modification to the Section 6.02 of the Bank
Agreement.”


 


(c)                                  Paragraph 6K.  New
paragraph 6K is added to the Agreement, such paragraph to read as follows:


 


“6K.                       Other Debt.  The Company will not make any optional or
scheduled payments or prepayments on account of principal (whether by
redemption, purchase, retirement, defeasance, set-off or otherwise) in respect
of any unsecured Debt incurred pursuant to paragraph 6C(2)(xi) prior to the
latest maturity date of any Note, other than principal payments not exceeding
$3,000,000 in the aggregate prior to such latest maturity date.  The Company shall


 


4

















 


not amend, supplement or otherwise modify the terms of any Debt
incurred under paragraph 6C(2)(xi), if such amendment, supplement or other
modification would not be permitted by the terms of paragraph 6C(2)(xi) without
the prior written consent of the Required Holder(s), which consent will not be
unreasonably withheld.


 


6.                                      Amendment
to Paragraph 8I.  Use of Proceeds.


 


Paragraph 8I of the Agreement is amended to add the following as the
new second sentence thereof:


 


“The proceeds of the Series C Notes will be used to refinance Debt,
make capital expenditures and/or for general corporate purposes.”


 


7.                                      Amendment
to Paragraph 10A.  Yield-Maintenance
Terms.


 


Paragraph 10A is amended by amending the definition of
“Yield-Maintenance Amount” in its entirety to read as follows:


 


“Yield-Maintenance
Amount” means, with respect to any Note, (a) other than with respect
to the Series C Notes, an amount equal to the excess, if any, of the Discounted
Value of the Called Principal of such Note over the sum of (i) such Called
Principal plus (ii) interest accrued thereon as of (including interest due on)
the Settlement Date with respect to such Called Principal and (b) with respect
to the Series C Notes (1) if the Settlement Date with respect to which the
Yield-Maintenance Amount is being determined is on or before June 18,
2007, an amount equal to the excess, if any, of the Discounted Value of the
Called Principal of such Series C Note over the sum of (i) such Called
Principal plus (ii) interest accrued thereon as of (including interest due on)
the Settlement Date with respect to such Called Principal, and (2) if the
Settlement Date with respect to which the Yield-Maintenance Amount is being
determined is after June 18, 2007, the percentage of the Called Principal
of such Series C Note set forth below opposite the Settlement Date:


 


	
  Settlement Date

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  After June 18, 2007 and on or before

  June 18, 2008

  	
   

  	
  3.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After June 18, 2008 and on or before

  June 18, 2009

  	
   

  	
  3.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After June 18, 2009 and on or before

  June 18, 2010

  	
   

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After June 18, 2010 and on or before

  June 18, 2011

  	
   

  	
  2.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After June 18, 2011 and on or before

  June 18, 2012

  	
   

  	
  1.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After June 18, 2012 and on or before

  June 18, 2013

  	
   

  	
  1.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  After June 18, 2013

  	
   

  	
  0.00

  	
  %

  



 


5

















 


The Yield-Maintenance Amount shall in no event be less than zero.”


 


8.                                      Amendments
to Paragraph 10B. Other Terms.


 


(a)                                  The
definition of “Closing Day” in
paragraph 10B of the Agreement is amended by adding “, with respect to the
Series C Notes, the Series C Closing” immediately after the words “the Series A
Closing”.


 


(b)                                 Paragraph
10B of the Agreement is amended by adding the following definitions thereto in
appropriate alphabetical order:


 


“Collateral Release Date”
shall mean the date upon which each of the following shall have occurred: (i)
the Company shall have obtained a rating of its senior unsecured debt of BBB –
or better from Standard and Poor’s, a division of the McGraw-Hill Company, Baa3
or better from Moody’s Investors Services, Inc., or BBB – or better from Fitch
Ratings, (ii) all of the other Creditors (as defined in the Intercreditor
Agreement) shall have directed the Collateral Agent in writing, in form and
substance reasonably satisfactory to the Required Holder(s), to release all
Liens in the Collateral securing any Obligations (as defined in the
Intercreditor Agreement) and to terminate all Security Agreements, Mortgages,
Pledge Agreements and any other instrument or agreement pursuant to which a
Lien has been created or arose to secure any or all of the Obligations (as
defined in the Intercreditor Agreement), (iii) all parties to the Intercreditor
Agreement shall have executed an amendment to or a restatement of the
Intercreditor Agreement, in form and substance reasonably satisfactory to the
Required Holder(s), amending the Intercreditor Agreement to reflect the
releases and terminations referred to in clause (ii), above, and the
termination of the appointment and authority of the Collateral Agent (except
with respect to distribution of “Specified Payments” (as defined in the
Intercreditor Agreement), (iv) all parties to the Bank Agreement shall have
executed an amendment to the Bank Agreement, in form and substance reasonably
satisfactory to the Required Holder(s), deleting any requirement that the
Company or any Subsidiary grant or maintain any Lien to secure any Obligations
owed thereunder,


 


6

















 


changing the definition of “Credit Documents” contained thereto to
delete the reference to “the Security Documents”, and making other changes to
reflect the terminations and releases referred to in clause (ii), above, and
the other amendments referred to in this clause (iv), and (v) no Default or
Event of Default shall have occurred and be continuing.


 


“Series C Closing”
shall have the meaning specified in paragraph 2H(1)(b).


 


“Series C Notes”
shall have the meaning specified in paragraph 2H(1)(b).


 


9.                                      Amendment
to Paragraph 11.  Miscellaneous.  Paragraph 11 of the Agreement is amended
to add new paragraph 11T thereto, such paragraph 11T to read as follows:


 


“11T.  Release of Collateral.  Prudential, each Purchaser and the Company agree that, effective
upon the Collateral Release Date:


 


(i) 
Prudential and each Purchaser will deliver a direction to the Collateral
Agent to release all Liens in the Collateral securing the Obligations (as
defined in the Intercreditor Agreement) and to terminate all Security
Agreements, Mortgages, Pledge Agreements and any other instrument or agreement
pursuant to which a Lien has been created or arose to secure any or all of the
Obligations (as defined in the Intercreditor Agreement);


 


(ii) 
paragraphs 3A(xi), 3A(xii), 3A(xiii), 3J, 3K, 6C(1)(i), and 7A(xv) of
this Agreement shall no longer be effective and shall be deleted from the
Agreement;


 


(iii) 
clause (i) of paragraph 6C(4) of this Agreement shall be amended in its
entirety to read as follows:


 


“(i)                               so long as no Default or
Event of Default has occurred and is continuing or would be caused thereby, the
Company or any Subsidiary may make any Acquisition; provided, however,
that any such Acquisition shall be permitted only if, (a) on or before or
concurrently with the effectiveness of such Acquisition and to the extent
required by the Required Holders, the Company delivers to the Holders (I)
guaranties duly executed by the parties thereto, in form and substance
satisfactory to the Required Holders, and accompanied by UCC searches and title
investigations, (II) such legal opinions in relation to the documents described
in the foregoing subclause (I) as the Required Holders


 


7

















 


may reasonably request, and (III) evidence of Company authority to
enter into, and environmental assessments with respect to, such Acquisition,
(b) the Company or such Guarantor is the acquiring or surviving entity, (c) no
Default or Event of Default exists and the Acquisition could not reasonably be
expected to cause a Default or Event of Default, (d) after giving effect to
such Acquisition on a pro forma basis, the Company would have been in
compliance with all of the covenants contained in this Agreement, including,
without limitation, paragraph 6A as of the end of the most recent fiscal
quarter, (e) the acquisition target is in the same or similar line of business
as the Company and its Subsidiaries, (f) the terms of paragraph 6G are
satisfied, and (g) the aggregate amount of cash (including the proceeds of any
Debt permitted to be incurred under clause (xi) of paragraph 6C(2) or otherwise
hereunder), Permitted Investments and the remaining unused portion of the
Revolver A Commitment under the Bank Agreement is sufficient to fund such
Acquisition;”;


 


(iv) 
clause (a) paragraph 8U of the Agreement shall be amended to delete the
words “and Liens in favor of the Collateral Agent” from the second sentence
thereof and clause (b) of paragraph 8U of the Agreement shall be amended to
delete the words “, other than in favor of the Collateral Agent” therefrom;


 


(v)                                 the definition of
“Assigned Agreements” shall be amended and restated in its entirety to read as
follows:


 


“Assigned Agreements”
shall mean all agreements, guaranties, contracts, leases, licenses, contract
rights and rights to payment, including purchase contracts, sales contracts,
transportation contracts, gathering service agreements, gas purchase
agreements, pipeline lease agreements, gas marketing agreements and gas
processing agreements, to which the Company or any Subsidiary is a party.


 


(vi) 
the definition of “Loan Documents” shall be amended to delete the words
“, the Security Documents” therefrom.


 


8

















 


10.                               Amendments
to Purchaser Schedule and Exhibits.


 


(a)                                  The
Purchaser Schedule to the Agreement is amended by adding thereto the
Series C Purchaser Schedule in the form attached hereto.


 


(b)                                 The
Exhibits to the Agreement are amended by adding thereto Exhibit A-3 in the form
attached hereto.


 


11.                               Representations
and Warranties.  In order to induce
the Purchasers to enter into this Amendment, the Company hereby represents and
warrants as follows:


 


(a)                                  The execution, delivery and performance by the Company and the Guarantors of this
Amendment, the Agreement, as amended hereby, and each of documents described in
paragraph 12 hereof to which each is a party, and the Loan Documents, as
amended hereby, have in each case been duly authorized by all necessary limited liability company, limited
partnership or other organizational action and do not and will not (i)
contravene the terms of the Company Partnership Agreement or the limited
liability company agreement or certificate of formation (or other
organizational documents) of the General Partner, the Company or any of
their Subsidiaries, (ii) conflict with or
result in any breach or contravention of, or the creation of any Lien under,
any document evidencing any contractual obligation to which the General
Partner, the Company or any of their Subsidiaries is a party and which could subject any holder of
Notes to any liability, (iii) conflict with or result in any breach or
contravention of any order, injunction, writ or decree of any governmental
authority binding on the General Partner, the Company, any of their
Subsidiaries or their respective
properties, or (iv) violate any applicable law binding on or affecting the
General Partner, the Company or any of their Subsidiaries.


 


(b)                                 Each
of the representations and warranties contained in paragraph 8 of the Agreement
is true and correct on and as of the date hereof, and will be true and correct
immediately upon, and as of the date of, the effectiveness of this Amendment in
each case except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date.


 


(c)                                  On
and as of the date hereof, and after giving effect to this Amendment, no
Default or Event of Default exists under the Agreement.


 


(d)                                 No
Governmental Action is required for the due execution, delivery or performance
by the Company or the Guarantors of this Amendment, the Agreement, as amended
hereby, each of the documents described in paragraph 12 hereto to be executed
by the Company or any Guarantor, or any of the Loan Documents, as amended in
connection herewith, to which the Company or any of its Subsidiaries is a
party.


 


(e)                                  This
Amendment, the Agreement, as amended hereby, each of the documents described in
paragraph 12 hereto to be executed by the Company or any Guarantor, and each of
the Loan Documents, as amended in connection herewith, to which the Company or
any Guarantor is a party, constitute legal, valid and binding obligations of
the Company or such Guarantor, as applicable, enforceable against the Company
or such Guarantor, as applicable, in accordance with their respective terms.


 


(f)                                    Each
of the Liens under the Security Documents constitutes (and each of the Liens
under the Security Documents to be delivered in connection with paragraph 5P of
the


 


9

















 


Agreement, as amended hereby, will constitute) an Acceptable Security
Interest on the Collateral purported to be encumbered thereby, enforceable
against all third parties in all jurisdictions, securing the payment of all
obligations stated to be secured thereby under such Security Documents, and the
execution, delivery and performance of this Amendment and the Agreement, as
amended hereby, do not adversely affect any Lien under any of the Security
Documents.


 


(g)                                 The
quarterly and annual financial statements most recently delivered to the
Purchasers pursuant to clauses (i) and (ii) of paragraph 5A of the Agreement
fairly present the Consolidated financial condition of the Company and its
Subsidiaries as of the respective dates thereof and the Consolidated results of
the operations of the Company and its Subsidiaries for the respective fiscal
periods ended on such dates, all in accordance with GAAP applied on a
consistent basis (subject to normal year-end audit adjustments and the absence
of footnotes in the case of the quarterly financial statements).  Since December 31, 2003 there has been
no material and adverse change in the business, condition (financial or
otherwise), operations, performance, properties or prospects of the Company or
any of its Subsidiaries.  The Company
and its Subsidiaries have no material contingent liabilities except as
disclosed in such financial statements or the notes thereto.


 


(h)                                 There
is no pending or, to the knowledge of the Company, threatened action or
proceeding affecting the Company or any of its Subsidiaries before any
Governmental Person, referee or arbitrator that could reasonably be expected to
have a Material Adverse Effect.


 


(i)                                     The
Subsidiaries owning pipelines in the State of Louisiana have the power of
eminent domain pursuant to the provisions of R.S. 19:2 of the Louisiana
Statutes.


 


(j)                                     Neither
the Company, the General Partner nor any of their Subsidiaries have paid, or
agreed to pay, any fees or other compensation for or with respect to the
amendment to the Bank Agreement referred to in paragraph 12(vii) hereof except
as expressly set forth in such amendment.


 


12.                               Conditions
to Effectiveness.  This Amendment
shall become effective as of the date (the “Amendment No. 2 Effective Date”)
first above written when and if each of the conditions set forth in this
paragraph 12 shall have been satisfied (or waived in writing by the Required
Holder(s)).


 


(a)                                  Execution
and Delivery of Documents. 
Each Purchaser shall have received the following, each to be dated the
date of execution and delivery thereof unless otherwise indicated, and each to
be in form and substance satisfactory to such Purchaser and executed and
delivered by each of the parties thereto, as applicable:


 


(i)                                     This
Amendment, dated as of the Amendment No. 2 Effective Date.


 


(ii)                                  A certificate of a
Responsible Officer, dated as of the Amendment No. 2 Effective Date, certifying
that (A) the representations and warranties contained in this Amendment and the
Agreement, as amended hereby, are true and correct on and as of the Amendment
No. 2 Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct


 


10

















 


as of such earlier date, (B) no Event of Default or Default exists as
of the date thereof and (C) all of the conditions specified in this paragraph
12 have been met.


 


(iii)                               An amendment to each
Security Agreement and Pledge Agreement increasing the dollar amount of the
additional Notes that may be issued under the Agreement referred to in the
recitals thereof to $95,000,000.


 


(iv)                              A certificate of the
Secretary or an Assistant Secretary of the General Partner, dated as of the
Amendment No. 2 Effective Date, certifying (A) the existence of the Company and
the General Partner, (B) the Company Partnership Agreement, (C) the General
Partner’s organizational documents, (D) the resolutions of the General Partner
approving this Amendment, the documents to be executed by the Company described
in this paragraph 12 and the related transactions, and (E) all documents
evidencing other necessary corporate, partnership or limited liability company
action and governmental approvals, if any, with respect to this Amendment and
the other documents executed in connection herewith.


 


(v)                                 A certificate of the
Secretary or an Assistant Secretary of the General Partner, dated as of the
Amendment No. 2 Effective Date, certifying the names and true signatures of the
officers of the General Partner authorized to sign this Amendment and the other
documents executed in connection herewith.


 


(vi)                              Certificates of the
Secretary or an Assistant Secretary of each of the Guarantors, dated as of the
Amendment No. 2 Effective Date, certifying (A) the organizational documents of
such Guarantor, (B) the resolutions of the governing body of such Guarantor
approving this Amendment, the documents to be executed by such Guarantor
described in this paragraph 12 and the related transactions, and (C) all other
documents evidencing other necessary corporate, partnership or limited
liability company action and governmental approvals, if any, with respect to
this Amendment and the other documents executed in connection herewith.


 


(vii)                           An executed amendment to the
Bank Agreement deleting Section 6.15 of the Bank Agreement, amending
Section 6.02 of the Bank Agreement in the same manner in which paragraph
6C(2) of the Agreement is being amended under Section 5(b) of this
Amendment and amending the Bank Agreement to permit the issuance of the Series
C Notes, certified by a Responsible Officer as being a true and correct copy of
such amendment as of the Amendment No. 2 Effective Date, and such amendment
shall be in full force and effect.


 


(viii)                        A favorable opinion of Baker
Botts, L.L.P., special counsel to the Company and the Guarantors, and Taylor,
Porter, Brooks & Phillips, LLP, Louisiana counsel to the Company and the
Guarantors, addressed to the Purchasers substantially in the form of Exhibit D
to the Agreement and covering this Amendment, the amendments referred to in
clause (iii) of this paragraph 12 and the Agreement and the Loan Documents, as
amended hereby or as contemplated hereby, and as to such other matters as the
Purchasers may reasonably request.  The
Company and each Guarantor hereby directs such counsel to deliver such
opinions, agrees that the issuance and sale of any


 


11

















 


Notes will constitute a reconfirmation of such direction, and
understands and agrees that each Purchaser receiving such an opinion will be
and is hereby authorized to rely on such opinion.


 


(ix)                                Such additional
documents or certificates with respect to such legal matters or limited
liability company, limited partnership or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by such
Purchaser prior to the purchase of the Series C Notes by the Purchasers.


 


(b)                                 [Intentionally Omitted]


 


13.                               Miscellaneous.


 


(a)                                  Effect on
Agreement.  On and after the
Amendment No. 2 Effective Date, each reference in the Agreement to “this
Agreement”, “hereunder”, “hereof”, or words of like import referring to the
Agreement and each reference in the Notes and all other documents executed in
connection with the Agreement to “the Agreement”, “thereunder”, “thereof”, or
words of like import referring to the Agreement shall mean the Agreement as
amended by this Amendment. The Agreement, as amended by this Amendment, is and
shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed.  The execution,
delivery and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy under the Agreement nor constitute a waiver of any
provision of the Agreement.  Without
limiting the generality of the foregoing, nothing in this Amendment shall be
deemed (i) to constitute a waiver of compliance or consent to noncompliance by
the Company or any other Person with respect to any term, provision, covenant
or condition of the Agreement or any other Loan Document or (ii) to prejudice
any right or remedy that any holder of Notes may now have or may have in the
future under or in connection with the Agreement or any other Loan Document.


 


(b)                                 Counterparts.  This Amendment may be executed in any number
of counterparts (including those transmitted by facsimile) and by any
combination of the parties hereto in separate counterparts, each of which
counterparts shall be an original and all of which taken together shall
constitute one and the same Amendment. 
Delivery of this Amendment may be made by facsimile transmission of a
duly executed counterpart copy hereof.


 


(c)                                  Expenses.  The Company confirms its agreement, pursuant
to paragraph 11B of the Agreement, to pay promptly all out-of-pocket expenses
of the Purchasers related to the preparation, negotiation, reproduction,
execution and delivery of this Amendment and all matters contemplated hereby
and thereby, including without limitation all fees and out-of-pocket expenses
of the Purchasers’ special counsel.


 


(d)                                 Governing Law. 
THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW
YORK.


 


(e)                                  Affirmation of Obligations.  Notwithstanding that such
consent is not required under the Guaranties, each of the Guarantors consents
to the execution and delivery of this Amendment by the parties hereto,
including, without limitation, the increase in the aggregate


 


12

















 


amount of Notes that may be issued under the
Agreement to $125,000,000.  As a
material inducement to the undersigned to amend the Agreement as set forth herein, each of the Guarantors
respectively (i) acknowledges and confirms the continuing existence, validity
and effectiveness of the Guaranty to which it is a party, including, without
limitation, with respect to the Series C Notes and any other Notes that may be
issued as a result of the foregoing increase, and (ii) agrees that the
execution, delivery and performance of this Amendment shall not in any way
release, diminish, impair, reduce or otherwise affect its obligations
thereunder.


 


(f)                                    The Agreement shall inure to the benefit of each
Series C Purchaser as a “Purchaser”
thereunder and each Series C Purchaser agrees to be bound by the provisions of
the Agreement applicable to a “Purchaser”
thereunder.


 


(g)                                 FINAL AGREEMENT.  THIS AMENDMENT, TOGETHER WITH THE AGREEMENT
AND THE OTHER TRANSACTION DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


{Remainder of this
page blank; signature page follows.}


 


13

















 


If you agree to the terms and provisions hereof, please evidence your
agreement by executing and returning at least one counterpart to the Company at
2501 Cedar Springs, Suite 600, Dallas, Texas 85201.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  CROSSTEX ENERGY SERVICES, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Crosstex Operating GP, LLC,

  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William W. Davis

  	
   

  
	
   

  	
  Name:

  	
  William W. Davis

  
	
   

  	
  Title:

  	
  Executive Vice President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Agreed to as of the
  Amendment No. 2 Effective  Date:

  



 


 


	
  PRUDENTIAL INVESTMENT MANAGEMENT, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian Lemmons

  	
   

  	
   

  
	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian Lemmons

  	
   

  	
   

  
	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PRUCO LIFE INSURANCE COMPANY

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian Lemmons

  	
   

  	
   

  
	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PRUCO LIFE INSURANCE COMPANY OF

  NEW JERSEY

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian Lemmons

  	
   

  	
   

  
	
   

  	
  Vice President

  	
   

  



 

















 


	
  GIBRALTAR LIFE INSRUANCE CO., LTD.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Prudential Investment Management (Japan), Inc.,

  	
   

  
	
   

  	
  as Investment Manager

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Prudential Investment Management, Inc.,

  	
   

  
	
   

  	
  as Sub-Adviser

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian Lemmons

  	
   

  	
   

  
	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  RGA REINSURANCE COMPANY

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Prudential Private Placement Investors,

  	
   

  
	
   

  	
  L.P. (as Investment Advisor)

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Prudential Private Placement Investors, Inc.

  	
   

  
	
   

  	
  (as its General Partner)

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian Lemmons

  	
   

  	
   

  
	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CONNECTICUT GENERAL LIFE INSURANCE

  COMPANY

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Prudential Investment Management, Inc.,

  	
   

  
	
   

  	
  as Investment Manager

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian Lemmons

  	
   

  	
   

  
	
   

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ZURICH AMERICAN INSURANCE COMPANY

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Prudential Private Placement Investors,

  	
   

  
	
   

  	
  L.P. (as Investment Advisor)

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Prudential Private Placement Investors, Inc.

  	
   

  
	
   

  	
  (as its General Partner)

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian Lemmons

  	
   

  	
   

  
	
   

  	
  Vice President

  	
   

  



 


Agreed to and acknowledged by each of the
undersigned for the purposes set forth in paragraphs 12(a)(viii)
and 13(e):


 

















 


	
   

  	
  GUARANTORS:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CROSSTEX ENERGY, L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Crosstex Energy GP, L.P.,

  	
   

  
	
   

  	
   

  	
  its general partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Crosstex Energy GP, LLC,

  	
   

  
	
   

  	
   

  	
  its general partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William W. Davis

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William W. Davis

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President and

  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CROSSTEX CCNG GATHERING LTD.

  	
   

  
	
   

  	
  CROSSTEX CCNG MARKETING LTD.

  	
   

  
	
   

  	
  CROSSTEX CCNG PROCESSING LTD.

  	
   

  
	
   

  	
  CROSSTEX CCNG TRANSMISSION LTD.

  	
   

  
	
   

  	
  CROSSTEX GULF COAST MARKETING LTD.

  	
   

  
	
   

  	
  CROSSTEX GULF COAST TRANSMISSION LTD.

  	
   

  
	
   

  	
  CROSSTEX TREATING SERVICES, L.P.

  	
   

  
	
   

  	
  CROSSTEX ALABAMA GATHERING SYSTEM, L.P.

  	
   

  
	
   

  	
  CROSSTEX MISSISSIPPI INDUSTRIAL

  GAS SALES, L.P.

  	
   

  
	
   

  	
  CROSSTEX MISSISSIPPI PIPELINE, L.P.

  	
   

  
	
   

  	
  CROSSTEX SEMINOLE GAS, L.P.

  	
   

  
	
   

  	
  CROSSTEX ACQUISITION MANAGEMENT, L.P.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Crosstex Energy Services GP, LLC,

  	
   

  
	
   

  	
   

  	
  general partner of each above limited partnerships

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William W. Davis

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William W. Davis

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President and

  Chief Financial Officer

  	
   

  
						



 

















 


	
   

  	
  CROSSTEX TUSCALOOSA, LLC

  	
   

  
	
   

  	
  CROSSTEX LIG, LLC

  	
   

  
	
   

  	
  CROSSTEX LIG LIQUIDS, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William W. Davis

  	
   

  	
   

  
	
   

  	
  Name:

  	
  William W. Davis

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President and

  Chief Financial Officer